Chris McKhann , analyst at OptionMonster.

A leading Chinese exchange traded fund is on the rise, and traders are bullish on its options.

The iShares FTSE/Xinhua China 25 Index Fund ( FXI) closed yesterday up 5.4% to $30.80, its highest level since the beginning of the year and just below resistance that was first put in place back in October. The ETF, which rose again to $31.31 in after-hours action, has been trading in a wide range recently but is well above its 52-week low of $19.35 from October.

Option traders are betting that shares of the iShares FTSE/Xinhua China 25 ETF can regain some of its old fire, as it shot up from $30 to above $70 in six months back in 2007. Yesterday's activity was concentrated at the April 32 strike, where more than 25,000 contracts changed hands, including a single block of 21,000 calls bought for $1.13, according to OptionMonster's tracking systems.

The other unusual volume was in May, where one block of 10,000 May 35 calls was purchased for $0.95 against open interest of 5,516 contracts. Total options trading by yesterday afternoon had exceeded 108,000 contracts, already 50% above the ETF's 20-day average volume.

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